VAT Treatment of Public Funds Received by Further Education Institutions
Summary
HMRC has published Revenue and Customs Brief 3 (2026) setting out its response to the Court of Appeal ruling in Colchester Institute Corporation v HMRC [2026] EWCA Civ 363, released on 27 March 2026. The brief addresses the VAT treatment of certain public funds received by further education institutions, updating HMRC's previous position to align with the court's judgment on whether public funding constitutes consideration for VAT purposes. Further education institutions receiving public funds should review their VAT accounting treatment and input tax recovery positions in light of this guidance.
“This brief explains HMRC's response to the Court of Appeal ruling on the VAT treatment of public funding received by further education institutions.”
About this source
His Majesty's Revenue and Customs is the UK's tax and customs authority. HMRC publications include guidance manuals, Revenue and Customs Briefs, consultation responses, Spotlight warnings on tax avoidance schemes, and the monthly tax receipts and National Insurance statistics. Around 115 publications a month. Spotlight notices in particular name specific avoidance schemes and put taxpayers on notice that participation may be challenged. Watch this if you advise UK taxpayers, manage transfer pricing for a multinational, follow R&D tax credit scheme reform, or track HMRC's positions on crypto assets, employment status, and disguised remuneration.
What changed
HMRC has issued Revenue and Customs Brief 3 (2026) responding to the Court of Appeal decision in Colchester Institute Corporation [2026] EWCA Civ 363 regarding VAT treatment of public funds received by further education institutions. The brief replaces or updates HMRC's previous guidance on whether public funding constitutes consideration for VATable supplies. Key implications: Further education institutions must reassess how they treat public funds in their VAT returns, potentially requiring adjustments to input tax recovery claims where funding was previously treated differently. Institutions should review existing arrangements and consider whether past returns require correction.
Archived snapshot
Apr 28, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Policy paper
Revenue and Customs Brief 3 (2026): VAT treatment of certain public funds received by further education institutions
This brief explains HMRC’s response to the Court of Appeal ruling on the VAT treatment of public funding received by further education institutions.
From: HM Revenue & Customs Published 27 April 2026 Get emails about this page
Documents
VAT treatment of certain public funds received by further education institutions
HTML
Details
This brief sets out HMRC’s response to the ruling of the Court of Appeal in the case of Colchester Institute Corporation (CIC) [2026] EWCA Civ 363. The judgment was released on 27 March 2026.
Updates to this page
Published 27 April 2026
Sign up for emails or print this page
Get emails about this page Print this page
Related content
Mentioned entities
Parties
Related changes
Get daily alerts for UK HMRC Publications & Guidance
Daily digest delivered to your inbox.
Free. Unsubscribe anytime.
About this page
Every important government, regulator, and court update from around the world. One place. Real-time. Free. Our mission
Source document text, dates, docket IDs, and authority are extracted directly from HMRC.
The summary, classification, recommended actions, deadlines, and penalty information are AI-generated from the original text and may contain errors. Always verify against the source document.
Classification
Who this affects
Taxonomy
Browse Categories
Get alerts for this source
We'll email you when UK HMRC Publications & Guidance publishes new changes.
Subscribed!
Optional. Filters your digest to exactly the updates that matter to you.